This weekend, a Barrons article cited a report by an investment research firm, Wedge Partners (Brian Blair and Ryan Hunter) that says eBay is planning a 1500 person layoff.
Reuters has re-reported the story as well here. The big question I'm hearing from ChannelAdvisor customers and readers is: What will eBay layoffs mean for sellers?
Where are the people?
With 16,000 people in the company this would be a < 10% reduction. Given that eBay hasn't really gone through this before, I'd guess this can be done with little to no impact on operations.
To understand the impact on sellers, we need to think about where the cuts will/would come from. While eBay doesn't report a break down of the 16k, we can guess where the pockets of people are. If you peel the onion on eBay you have:
- Paypal - Paypal is the crown jewel of eBay and has grown substantially head-count wise over the last years. Here's where the people are:
- Paypal has the business people in San Jose at their own campus.
- Paypal has tons of customer service/fraud prevention people in Omaha/Salt lake. I don't think it would be prudent to do anything here given the busiest season starts now.
- I'm going to guess Paypal has limited business people internationally, but probably big fraud prevention teams in their customer service center.
- Skype - Skype is probably a 1000 person company at this point and it's a given that it's the fastest growing part of eBay.
- eBay marketplaces -
- I'd guess that 8k of the 16k people are at eBay marketplaces and housed at the 'mother ship'.
- 2125 Hamilton is the home of eBay Park which you can tour on gmaps with their cool 'Street View' (click here, zoom in and select street view - look to your left for the 4 buildings by starbucks and to your right for the other 4.)
- With 8 very large building's I'd say there are a good 4-6k people in that park. This report from 2003 cites 1500 out of eBay's total of 4200 at the time, so I'd imagine that number has more than doubled in the last 5 yrs (wow - eBay's headcount has gone up 4X since then!). So let's say 5k in eBay Park
- That leaves 3k that I' would say are about 1000 international and 2000 in Salt Lake.
- The international offices are run pretty lean with most functions being supported out of the US (engineering and admin for example).
- Misc
- There are small offices in LA, SFO and a variety of other places from acquisitions (StubHub, rent.com, etc.)
Where are layoffs likely?
This is all speculation on my part, but logically it seems like it wouldn't be prudent to do anything at Skype, Paypal or places like Stubhub that are big growth drivers. Thus you're left with eBay marketplaces which is the anchor to the conlomerate and should bear the weight of any downsizing.
Within eBay marketplaces, I don't think International has room for much change, therefore you're left with the 2k people in SLC and the 5k people in SJC.
This is where it gets tough. Ebay has talked up the benefits of increasing customer service and TnS staff in SLC with Wall St. That could make it hard PR-wise to cut there.
That leaves 5k in SJC at the most risk IMO. If the 1500 were localized to that group, what looked like 10% now becomes 30% which is pretty deep and risky. In eBay Park you have:
- Lots of 'admin' - finance, HR, legal. I think one whole building floor is just legal. With eBay's legal issues though, this could be an area that's hard to reduce.
- Seller experience - possibly impacted
- Buyer experience - probably not impacted as eBay doesn't want to be seen underinvested in such a strategic area.
- Marketing - probably impacted. With eBay spending less and less on marketing, there are probably big reductions that could be made here
- Engineering - most of eBay's R+D is done in SJC with some pockets outsourced to India and other places.
- eBay Motors - Motors seems to replicate lots of the functions at other parts of eBay. I'd guess lots of synergies could be found by undoing all of this duplication of effort.
- CS+TnS - eBay has some functions like community, customer service and trust and safety with some headcount in SJC that largely creates policies for folks in SLC. There maybe room there to trim as well
- Middle management - eBay has lots of VP, Manager, Director level people that JD may look at eliminating as a way to streamline decision making. Most eBay employees are at least 5+ layers away from JD which seems ripe for bureaucracy.
What's all this mean for sellers?
If I'm wrong here and SLC is hit with the bulk of the layoffs, that's where 90+ eBay TSAMs are (Top Seller Account Managers). That would be bad for sellers as that group is the lifeline a seller has into eBay. However, if customer service or trust and safety in SLC are decreased that wouldn't directly impact sellers, but it could hurt the buyer experience (which is why I don't think it will be an area that is touched).
Seller development is at risk, but I think it's a smaller group so probably not something that would be cut deeply. Any admin, marketing or other cuts are likely to not
All in, I'd say there's a low (10-20%) that any reductions would impact sellers, but until we see what eBay does, it's all a guessing game.
Disclosure: Author is long Google and eBay.
























This article has 29 comments:
I am a small seller - I list, I sell and I mail in my fees to ebay.
The only ebay seller contact I have are the obnoxious notices from ebay
that I should lower the price of my items (so ebay can make their cut) or that they haven't received my payment soon enough (they have received it within 30 days - but still want it sooner).
Ebay is way overstaffed with nerds who have nothing better to do than dream up ways to aggravate the shit out of people with their so called improvements, constantly changing forms and procedures that have been working fine
They really don't get the simple premise that drives the whole thing : people list items, other people view them and if they NEED or WANT the items, they purchase them.
No amount of "improvements" and flowers and fancy borders in the ads will make someone buy something they don't want or need. They (ebay designers) are pretty stupid if they think otherwise.
There is a saturation point in our society / world that only so many people want to shop or buy in this manner.
I am not a conspicuous consumer and buy virtually nothing on ebay - I prefer to see and examine what it is I'm buying. I like to deal face to face and know where to go if I have a problem : ala AJ Foyt with tools (Sears / Craftsman TV commercial).
All Ebay and the financial world think about is how to try and ensnare the whole universe into buying every last thing online.
Maybe all you financial "brains' should purchase your spouses on ebay too - no test "drive" - what do you think of that idea ??
I dont understand, How can they be laying off when you look at job opportuniies at ebay.com? Is this a way for ebay to raise there stock prices?? It seems ebay is up to there fraudlant selfs again. Lay offs mean stocks rise, but they continue to hire people more thann ever. Crooks!!!!
Customer Solutions Agent 29947BR Customer Support US - Nebraska - Omaha PayPal Omaha 15-Sep-2008
Search Marketing Manager 29635BR Marketing / Sales US - California - San Francisco StubHub San Francisco 12-Sep-2008
Fraud Analyst 29941BR StubHub San Francisco 12-Sep-2008
Internet Marketing Analysis Manager 25798BR Marketing / Sales US - California - San Jose eBay San Jose 12-Sep-2008
Fraud Analyst 29882BR Trust & Safety / Fraud US - California - San Francisco StubHub San Francisco 12-Sep-2008
Microsoft Great Plains Developer 29735BR Tech - Software Engineers US - California - San Francisco StubHub San Francisco 11-Sep-2008
Analyst, IM/Advertising Operations 25792BR Marketing / Sales US - California - San Jose eBay San Jose 11-Sep-2008
UI Designer 29926BR StubHub San Francisco 11-Sep-2008
Sr. Manager, Storage Operations 26939BR Tech - IT / Operations US - Arizona - Phoenix PayPal Phoenix 11-Sep-2008
Principle Storage Engineer 26938BR Tech - IT / Operations US - Arizona - Phoenix PayPal Phoenix 11-Sep-2008
Director, Business Continuity Planning 25975BR Tech - IT / Operations US - California - San Jose PayPal San Jose 11-Sep-2008
Research Scientist 29900BR Tech - Software Engineers US - California - Brisbane Shopping.com USA 11-Sep-2008
Community Support Representative 29905BR Customer Support Philippines - Makati City PayPal Philippines 11-Sep-2008
Software Engineer 27572BR Tech - Software Engineers US - Nebraska - Omaha PayPal Omaha 11-Sep-2008
MTS L2 Engineer 28501BR Tech - Architecture US - Nebraska - Omaha PayPal Omaha 11-Sep-2008
And their customer service contact form now has nothing relevant to the questions.
Whatever ebay does impacts sellers. besides, they're moving towards a type of PPC / adwords/ comparison shopping model it seems anyways. Soon they wont need all those bodies. They'll just focus solely on relationship management
Also, I am so dumb that I didn't even know what layoff really means. By laying off employees, it doesn't necessary means that I can't continue to hire. I just can't hire for the same position, but I can still hire talented employees, which I am too dumb to qualify for anyway.
Nothing. Human Customer Service is near non-existent, and a decrease in eBay CS personnel would not be noticed. And due to high IT (computer) department turnover, even with impending code monkey cuts system software will remain buggy.
But this topic is moot. Checking elsewhere, some stock analysts won't be mollified unless there's a 20% cut in personnel.
Absolutely nothing.
I think we continue to lose sight of the fact that ebay WANTS all the sellers gone! They want to be Amazon without a CLUE how to BE Amazon.
There is an absolutely EXCELLENT recent article here on Seeking Alpha which includes Amazon. I highly recommend reading it.
seekingalpha.com/artic...
ebay coulda-been-shoulda-be... on this list but the last few years, and particularly and spectacularly this year, has self-exterminated. And as another poster brilliantly pointed out, the perception is affecting the next generation. Their perceptions are now becoming fixed. An extraordinarily bad and unwise move!
seekingalpha.com/artic...
They, Apparently, are UNEDUCATED in Real World Economics.
I could run Ebay and Everyone would be Back "In the Chips".
It's taking more work to screw it up than it does to let the Old Tried & True methods continue to bare Fruit.
John Don...& his Cronies need to face the reallity of Massive Numbers of Sellers leaving Ebay in Droves. Thousands of Ousted Ebay Sellers won't be able to heat their homes this year, or pay their mortgages, or pay for their health insurance now.
Underestimating The SCOPE OF THE DAMAGE here is a Huge Mistake on Ebay's part.
And the Media isn't helping by keeping Quiet on this Story.
Ebay MUST return to Normal, or be dusted from the Economic Landscape.
Wonderful site; very clean and uncluttered and attractive!
Why would I want China junk or big box/little box items when I can go to the Dollar Tree or Target?
I'd rather have what YOU have to offer by far!!! What utter idiots are running ebay now!
Agree, the message needs to get out to network and published media.
Hmmm.
I take Pride in serving my Clients :o)
Too Bad We can't be Elected to fill the Top Ebay Spots....
Now THERE's an Idea !
Most likely places for cuts:
- Customer Support. Of the 15,000 employees almost half are CSRs, therefore this is the logical place to cut.
- Middle management - there are LOTS of managers and directors with no direct reports within eBay. There are also a fair number of "managers reporting to managers" and "directors reporting to directors." I say flatten the organization and get rid of the excess. Interestingly under Matt Carey there was supposed to be a rule where each manager must have 3 or more direct reports. But I guess that's just a rule-of-thumb and not a corporate policy.
- eBay has jumped on the "work part time at home" band wagon so maybe a portion of F/T positions will be converted to contracts.
As I mentioned in a separate thread... folks if you want eBay to change for the better forget about talking to Donahoe or any of the execs. Go to the top and contact Pierre Omidyar (founder and chairman of the board).
eBay's customer representatives are so poorly informed about the company's rules and policies that in lieu of trying to contact them, new sellers most frequently go to eBay boards to get help from other sellers and to PowerSellersUnite for answers to really complicated problems. If you can reach them at all - they are reading canned responses to your questions that often make no sense.
Dear Ebay so long..... and thanks for all the fish
Remember? The auction business and the rare, unusual, hard to find collectibles, used goods, and antiques were what ebay was famous for and what put them on the map. Since they will all be leaving to go to Worthpoint and GoAntiques, ebay won't have to use those sellers to bring in business, they can rely on the advertising schemes that Mr Wingo has sold them.
So far I don't see that working very well. But I could be wrong. I guess we can wait and see what happens, in this case, watch the stock and the 3rd quarter reports as ebay tries to tread above water, as they sell ff bits and pieces of itself.
Ebay cannot be amazon.Ebay cannot be Craigs, Ebay cannot be Nordstroms rack, or Filenes Basement, or CarMax. Ebay cannot have ads all over it's special auctions from people who spent hours putting together a nice template and nice photo, ebay cannot afford to pay so much to all their management employees and affiliated partners, when they need more help in technology. They don't need the ads, they need to maintain the best search engine around, not destroy it in order to gear up to be an online mall.
Ebay is none of those things. They are an online auction site and an online auction community.
Unfortunately, they have been run by non ebay sellers. That's why they are falling off their throne now, and will continue to fall as long as they follow the Walmart Nordstroms CarMax model, which they really have no experience in either.
It is too late now, the process has begun, and the sellers who used to be the most loyal and long term participants and renters of ebay space will now be moving on to greener pastures. The exodus has been obvious, even though ebay is trying to cover it up with catalogs full of listings, that are not even selling, then covering up their deficits by selling off the junk(stumbleupon) that they bought as a mistake a few years ago..(or was that last year??)They can't cover up marketplaces with paypal's income. it will not be enough.Someone needs to ask ebay to break out the exact income of the core site, and report it with the cost of operating that site, not including all the decorative junk they add to it, to make it look like it's doing well. The stockholders deserve to know, and so do the new sellers who are entering this deteriorating minefield, only to find out that the attraction to ebay by buyers is not what it was, when they were signing up to join a community of auctions.
The ad junk is junk, whether it is there, here, or any other site, No one really cares about it or uses it. Selling it to online business is a predatory practice that needs to stop, and remain on media sites only.If it was in the community forums that would be ok, but not on the business pages themselves. It's insulting and commercially wasted on folks who are ANNOYED by it.
Anyway, the collectibles site that everyone will be going to is Worthpoint and GoAntiques. Ebay is only good at letting go of affiliates that are beneficial.What a terrible error in judgement! This will cost them dearly, and they still don't "get it"...well, It must have something to do with not wanting private companies around that they cannot control with their subversive policies...Good luck Scot, your days are numbered too.
Now I get dinged in my "Search Status" for buyers rating my shipping fees that are controlled by USPS..!!! Total BS..!! I DO NOT CREATE HIGH SHIPPING FEES..USPS does.!!! I am being forced to start my own website to sell my huge inventory. Where is Yahoo auctions?? This would be a PERFECT time for them to ramp up a better system then Ebay clowns...!!
On Sep 16 12:48 AM J.Donahoe wrote:
> Please stop being such soretails. The changes made to eBay is best
> for the future of the eBay community.Seller satisfaction is high,
> and listings are up.
On Oct 08 10:18 PM SCOTTM33 wrote:
> YOU ARE FULL OF IT, i HAVE BEEN WITH EBAY FOR 9 YEARS AND THEY HAVE
> DESTROYED EVERTHING WE BUILT IN THAT TIME.